Franchisees, Is Your Operations Manual Changing Your Franchise Agreement?

Written by Keith R. Miller

As franchise owners, we all sign franchise agreements that set the terms and conditions of our business, and the relationship with our franchisor. Most of those franchise agreements contain a condition that you will follow the then current Operations Manual. While it is understandable that the Ops Manual must change, a new sandwich is introduced, the Ops Manual must include the directions for making that sandwich. However, we are increasingly seeing franchisors take advantage of Ops Manual changes, not for operational changes in the business, but to indirectly change terms of your contract. An example would be adding an expensive remodel into the Ops Manual that wasn’t spelled out in the Franchise Agreement, nor disclosed in the FDD.  Another example is the limiting of how many outlets you can sell to a buyer, which may require you to break up your company, which devalues your equity.  For all the franchise owners out there, is this happening to you, and if so, give us your example.  Send your example to my email, I will compile this information confidentially and may post eliminating your name and brand (unless you tell me not to post at all).  As I continue to work on advancing franchisee causes, this information will be valuable.